UK economy to remain flat in 2013, report shows

A new report has indicated the UK is heading for another flat year in 2013.

The National Institute for Economic and Social Research (Niesr) has predicted that gross domestic product (GDP) will rise by only 0.7 per cent, after being unchanged over 2012 as a whole.

It went on to predict that growth will accelerate slightly in 2014 to 1.5 per cent, but noted GDP will not reach its previous peak in 2008 until 2015, with GDP per head not matching that figure until 2018.

Unemployment is forecasted to rise again to eight per cent, but will fall persistently from 2015, while Consumer Price Index (CPI) inflation will be a little over the two per cent target rate at 2.4 per cent in 2013 and 2.3 per cent in 2014.

The Niesr advised that more public sector investment could help stimulate the economy and support a gradual increase in corporate spending, which in conjunction with increased consumer spending would help provide the basis of a more sustained recovery in the long run.

By Asim Shah